Oil prices on Thursday jumped above the $100 per barrel mark following Russia’s invasion of Ukraine.
This will be the first time since 2014 that the International benchmark Brent crude surpassing $100 a barrel.
While this means more oil revenues for Nigeria, Africa’s biggest crude exporter, it has also constituted a threat to the N3 trillion Nigeria has planned to spend as fuel subsidy from January 2022.
While over N400 billion is to be spent between January and June, President Muhammadu Buhari has also approached the National Assembly to get over N2.5 trilĺion for fuel subsidy.
The attack in Ukraine is expected to have far-reaching implications for energy markets given Russia’s role as the world’s second-largest producer of natural gas and one of the world’s largest oil-producing nations.
Oil prices have jumped more than $20 a barrel since the start of the year amid escalating Russia-Ukraine tensions. Now, it is feared a wave of international sanctions on Russia’s energy sector could disrupt supplies.
Brent crude futures rose more than 8% at one point to hit a session high of $105.79 per barrel, the highest level since August 2014. U.S. West Texas Intermediate crude futures, meanwhile, climbed over 9% to trade as high as $100.54, a price last seen in July 2014.
Both contracts retreated during afternoon trading on Wall Street. WTI settled the day 71 cents, or 0.77%, higher at $92.81 per barrel. At one point the contract dipped into negative territory. Brent crude gained 2.3% to settle at $99.08 per barrel.
Natural gas prices popped 6.5%. Spot gold, traditionally seen as a safe-haven asset, climbed 2.6%, last trading at $1,957.46 per troy ounce.
Russian President Vladimir Putin launched an attack on Ukraine early Thursday local time after months of military buildup along the border they both share. The directive came days after the Kremlin leader formally recognized the independence of two pro-Moscow separatist regions in eastern Ukraine.
Explosions were heard in Ukraine’s capital of Kyiv, NBC News reported. The crisis in Ukraine is changing rapidly and specific reports from the country are difficult to confirm.
Ukrainian Foreign Minister Dmytro Kuleba said via Twitter on Thursday that Putin had “launched a full-scale invasion,” of the country, which he described as “a war of aggression.” Kuleba called on world leaders to stop the Russian president. “The time to act is now,” he said.
The United States, Canada, Britain, the European Union, Australia and Japan were among the countries to announce the first wave of sanctions against Russia earlier this week, targeting banks and wealthy individuals.
A second barrage of measures is widely expected shortly, although some analysts believe Western governments will likely exempt energy transactions from the sanctions.
The International Energy Agency said earlier this week that while the specific impact on world oil markets was “yet to be determined,” member countries were on standby “to act collectively to ensure that global oil markets are adequately supplied.”